ICICIDirect - Pick of the Week - Balaji Telefilms (Buy: Rs 117, Target: Rs 143)

[Sunil]

Balaji Telefilms (BALTEL)

Current Price: Rs 117           Target Price: Rs 143                    BUY

Balaji Telefilms has retained its numero uno position in the Hindi
television content space with path-breaking programming. It looks set to
continue its dominance in the Hindi TV entertainment space with over 50%
market share even in the face of a surfeit of reality and game shows. The
advent of direct-to-home (DTH) and conditional access system (CAS) is
expected to open up more opportunities for the company.

The stock currently trades at Rs 117, translating into a P/E multiple of 10x
FY07E earnings and 8.30x FY08E earnings. The company has successfully
retained its prime position in the television content space for past six
years and is well placed to remain one of the preferred picks in the
entertainment sector. We expect the stock to give a 22% return over the next
3-6 months with a target price of Rs 143.

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